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Fraud*According to the Collins English Dictionary 10th Edition fraud can be defined as: "deceit, trickery, sharp practice, or breach of confidence, perpetrated for profit or to gain some unfair or dishonest advantage".[1] In the broadest sense, a fraud is an intentional deception made for personal gain or to damage another individual; the related adjective is fraudulent. The specific legal definition varies by legal jurisdiction. Fraud is a crime, and also a civil law violation. Defrauding people or entities of money or valuables is a common purpose of fraud, but there have also been fraudulent "discoveries", e.g. in science, to gain prestige rather than immediate monetary gain*As defined in Wikipedia

Wednesday, April 22, 2009

I don't want anyone to think that I am blaming Goldman Sachs or any of the executives directly for what you're about to read, but companies like Goldman Sachs and the executives had an obligation to act responsibly and think about others, instead of how to line their own pockets at the expense of others . . . because now there is blood on the hands of those responsible for the worst financial crisis in the history of the United States.

We've seen more families being murdered by father's than we have in my 53 year memory bank. This week two father's in Maryland killed their families. I remember hearing the Breaking News about Christopher Wood killing his wife and three children while they slept in their beds.

The news said he had psychiatric problems. I thought . . . yeah, when you can't feed your family, that will drive you nuts.

Now the press is quiety telling us the real story. The Woods were having financial difficulties from an overextended mortgage and credit cards. They also owned a home in Florida that they were not able to sell. And I'm not trying to make excuses for this guy or his financial situation.

BUT . . . Big BUT here. He is not alone. And unless Obama goes after the people that created the toxic derivatives and funny-money loans that were bundled up and shipped off to pension funds and other fiduciary money, the violence will get worse. Moreover, as we approach the 40th anniversary of the violence we saw in 1969, the violence this summer could make that ugly blemish on our dignity look like pre-school.

Let's face it. Hank Paulson was the top dog when it came to companies that created, packaged, and sold toxic assets. So if Obama wants to show us CHANGE, start with the guy that was more responsible for our financial crisis than any other single person on the planet. And then he can walk down the street and yank Chris Dodd and Barney Frank out of their offices and into jail.

For those of you that still want to believe the crap Obama and his team of elves are dishing out, read about Christopher Wood and his family - Click Here

And while you're at it, read about William Parente who just killed his family - Click Here

I hope everyone takes a few seconds out of their busy day and prays for the Woods family, the Parentes family and millions of other families that are also desperate.

"When you pass through the waters, I will be with you; and through the rivers, they will not overflow you. When you walk through the fire, you will not be scorched, nor will the flame burn you." Isaiah 43:2

Expert Warns the Country of More Familicides - Click Here - Send this post and this link to every Congressman, Senator and Administration figure you can.

The big three banks reporting last week-Citibank, Goldman Sachs, and JP Morgan-all reported huge revenues from their trading desks. As we reported last week, Goldman's $6.6 billion in trading revenues was not only 70% of total revenues, but it was also a ten billion dollar improvement on a $4 billion loss in the fourth quarter.

JP Morgan reported nearly $5 billion in revenues from fixed income securities trading. And Citigroup reported $4.69 billion in fixed income trading. In fact, all of Citigroup's other major operating segments reported declining revenues for the quarter. Its global credit card revenues fell by 10%. Consumer banking revenues were down 18%. And Citi's Global Wealth Management revenues were down 20%.

But something magic happened in the fixed income trading group for Citi. This is pure gold if you like arcane financial statements packed with fictional earnings. If you dig into the quarterly report, you'll learn than fixed income trading revenues were boosted by a "net $2.5 billion positive CVA on derivative positions, excluding monoclines, mainly due to the widening of Citi's CDS spread.

That takes some sorting out. A CVA is a "credit value adjustment." As you can learn here, it's the credit risk premium of a derivative contract. Once you sort it out, you learn that Citi "made" $2.5 billion on a derivatives position designed to profit when the companies own credit default swaps spreads widen.

Or, in plain English, Citi profited because it made a bet that the cost of insuring itself against a default would go up. The credit default swap market is the place where you can bet on the credit worthiness of a firm, or, essentially, the chance that a firm might default on its bonds. Citi appears to have reported a $2.5 billion trading gain in the fourth quarter precisely because the market thought the company stood a good chance of failing (hence the widening CDS spread).

As far as we can tell, if you use this kind of perverted logic, the closer Citi gets to bankruptcy, the more money it would "make" on its derivatives. That shows you how bogus the quarterly number was. The company reported declining revenues in its core banking and lending activities. But thanks to fixed income and this handy $2.5 billion CVA, the company was able to report $1.5 billion in net income.

Also, don't forget that all of the banks benefitted from what financial sector analyst Meredith Whitney called "back door financing." Whitney described what amounts to Fed-sanctioned front-running of the fixed income market by the banks. The Fed publicly telegraphed its intention to buy $750 billion mortgage backed securities from Fannie Mae and Freddie Mac and $300 billion in U.S. Treasury bonds. And that was AFTER it announced in late November of last year it would be wading in as a buyer for all agency bonds to support the U.S. mortgage market.

I find it amazing Hank the Tank Paulson has not been drilled by the rabid congress.

Today Ken Lewis is saying Paulson forced him to buy Merrill! The shareholders of BofA should be suing Hank Paulson and the US Government!

And it is a riot that Pelosi is going to lead the Wall Street Inquisition as to why Lehman failed.

My own pet conspiracy theory is that Hank Paulson made a deal with Geithner/Obama. Remember, the polls were pretty even until Lehman collapsed. The deal could have been let Lehman fail, Obama should spike in the polls, and if he wins Geithner becomes Treasury Secretary, while Hank the Tank gets to ride off into the sunset without the angry mob chasing him.

Heck, how much of the angry mob really knows who Hank Paulson really is?

Do they know The Tank made hundreds of millions, if not billions, pushing the government to allow the banks to take insane amount of risk and then cashed out at the top of the cycle to then work for the government?

Hank makes the current slew of Wall Street execs look like choir boys.

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The men the American people admire most extravagantly are the greatest liars; the men they detest most violently are those who try to tell them the truth. … H.L. Mencken

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It is impossible to calculate the moral mischief, if I may so express it, that mental lying has produced in society. When a man has so far corrupted and prostituted the chastity of his mind as to subscribe his professional belief to things he does not believe he has prepared himself for the commission of every other crime. … Thomas Paine 1737-1809, Anglo-American Political Theorist, Writer

Laws just or unjust may govern mens actions. Tyrannies may restrain or regulate their words. The machinery of propaganda may pack their minds with falsehood and deny them truth for many generations of time. But the soul of man thus held in trance or frozen in a long night can be awakened by a spark coming from God knows where and in a moment the whole structure of lies and oppression is on trial for its life.: Sir Winston ChurchillWhen governments fear the people, there is liberty. When the people fear the government, there is tyranny. - Thomas Jefferson

When cheaters prosper, we end up with the worst possible system and to call it a free market system is an obscenity. -William BlackWhen the people fear their government, there is tyranny; when the government fears the people, there is liberty." - Thomas JeffersonI believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around the banks will deprive the people of all property - until their children wake-up homeless on the continent their fathers conquered. Thomas Jefferson - 1802

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